Jan 3 (Reuters) - Gold prices retreated from a three-week high on Friday, pressured by a robust dollar, while markets braced for potential economic and trade shifts under U.S. President-elect Donald Trump.

Spot gold eased 0.5% to $2,642.76 an ounce at 11:42 a.m. ET (1642 GMT), after hitting its highest level since Dec. 13. Bullion is up about 0.8% for the week so far. U.S. gold futures were down 0.5% at $2,656.60.

The new president's agenda that supports higher tariffs has boosted the dollar and created significant underlying pressure on metal markets, said Nitesh Shah, commodity strategist at WisdomTree.

The dollar index was set for its strongest weekly performance since mid-November, making gold pricier for overseas buyers.

"For most of the metals, the slowing of global trade has typically been coupled with a slowing economy and therefore slowing demand for metals," Shah said, referring to the potential impact of Trump's proposed trade tariffs.

A headwind from a stronger dollar is likely to persist for gold, but it looks like debt will continue rising in the U.S. and other countries, and geopolitical issues aren't going to end soon, so it should stay supported, he added.

Trump is set to take the oath of office on Jan. 20. His proposed tariffs and protectionist policies are expected to fuel inflation.

This could slow the U.S. Federal Reserve's interest rate cuts, limiting gold's upside. After three rate cuts in 2024, the Fed projects only two reductions in 2025 due to persistent inflation.

Gold, which thrives in low-rate environments, is currently benefiting from seasonal demand.

"January has been consistently seeing the best price gains over the last 20 years as investors and asset allocators open fresh new long positions, coupled, of course, with good jewellery offtake for the festive season," independent analyst Ross Norman said.

Spot silver rose 0.5% to $29.73 per ounce, platinum added 1.9% to $940.05, and palladium gained 1.7% to $927.14.